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# Honda of SM to pay back $829K to its customers
- URL: https://www.smdp.com/honda-of-sm-to-pay-back-829k-to-its-customers/
- Published: 2006-03-01T16:00:00.000Z
- Updated: 2026-10-23T17:18:54.000Z
- Author: Carolyn Sackariason
- Tags: Crime, Santa Monica, #archive-import

*Criminal cases against six employees pending*

An estimated 1,500 customers who were ripped off by a Santa Monica car dealership can expect to be reimbursed in the next few months.

Kramer Motors Inc., the parent company of Honda of Santa Monica, must within the next two months send out notices and release forms to potential customers who are eligible for reimbursement, according to a court settlement with the Los Angeles District Attorney’s Office.

Those who might be eligible are customers who purchased or leased a vehicle from the dealership, located at 1720 Santa Monica Blvd., between April 7, 2000, and Oct. 31, 2002\. The settlement, which was signed by a judge on Feb. 8, is separate from the pending criminal cases of six former Honda of Santa Monica sales representatives who allegedly scammed hundreds of thousands of dollars from customers by tacking on charges of “theft etch” to their contracts without their knowledge. Theft etch marks a vehicle’s parts with traceable numbers in the event of a theft. The aftermarket product would show up on the sales contract as a VT registration charge, which doesn’t exist, prosecutors said.

Kramer Motors has agreed to hire an outside firm to serve as an administrator in handling the reimbursements. The firm will determine how much each customer will receive. Los Angeles Deputy District Attorney Dana Aratani said the reimbursements range from $100 to $1,000, with the average claim being $400\. It’s estimated that Kramer Motors will pay back about $829,000 in reimbursements.

Kramer Motors has turned over a list of eligible customers to the DA’s office. This list has been checked against its own internal list of names that stemmed from investigators’ probe into the dealership, Aratani said.

Kramer Motors has three months from the Feb. 8 settlement to notify customers that they are eligible for reimbursement.

Customers must fill out the notice and release, and send it back to Kramer Motors within six months of the Feb. 8 judgment in order to be eligible. Once the claim has been sent in by the customer, Kramer Motors has 30 days to send the reimbursement check, according to the settlement agreement.

The North Carolina-based automotive company already has sent a check to the DA’s office for $548,000\. That’s for civil penalties and costs associated with violating provisions of the Business and Professions Code. Of that amount, $73,000 is for costs of the investigation, which began in July 2002, as well as the prosecution of the case, which began in October of 2005 and still continues.

Part of the money will go into a general fund that could be used in the future to investigate and prosecute other consumer fraud cases, Aratani said.

CAUSES FOR ACTION SETTLED The settlement, which is not to be construed as an admission of liability, claims that Kramer violated the Business and Professions Code by making untrue and misleading statements relating to charges of theft etch, describing it as “VT” registration. Kramer also misrepresented prices and quotes that included significant undisclosed charges, which inflated the monthly payments, according to the complaint for injunction filed by the DA’s office last month.

The complaint also states that Kramer misrepresented car sales and leases by failing to adequately disclose that charges for the theft etch were included in the gross capitalized cost of the vehicle. The dealership also failed to fully explain to customers that they were being charged for aftermarket, and finance and insurance products.

The second cause of action in the complaint states that Kramer violated the Business and Professions Code with unfair competition practices by lying to customers about their contracts and charges. Kramer made customers sign documents that were blank, or partially completed, which were different than what was orally negotiated. The car dealership also failed to activate the theft etch or honor obligations it made in the agreements, the complaint states.

Under both sections of the Business and Professions Code, Kramer has been assessed $2,500 for each act of misleading or untrue statements.

Honda of Santa Monica representatives didn’t return calls seeking comment. In the past, they’ve told the Daily Press that sales representatives involved in the scam have been fired and those practices are no longer used at the dealership.

EMPLOYEE BLOWS THE WHISTLE The DA’s office launched an investigation into the dealership in July 2002, after an employee tipped investigators off to the alleged scam. The dealership was raided by investigators, including FBI agents, who seized boxes of files and computers from the finance and sales departments on Sept. 25, 2002.

The investigation was concluded last year when the DA’s office filed a felony complaint against six former employees, alleging they overcharged customers to pad their own commissions. Former employees Ali Asghar Hussain, Hamid Reza Khaki, Yaprem Zohrab Yaralian, Ahtamet Uersunthornwattana, Yaser Alkasem and Thomas Holterhoff are scheduled to appear in court on March 9 for a preliminary hearing, when it will be determined by a judge if there is enough evidence to go to trial.

Sales representatives at Honda of Santa Monica also attached overcharges and fake charges for LoJack systems, and what was called a “California tire fee/doc fee,” “Touch of Class” and “tint.” Wheel locks also were part of the alleged scam, according to the complaint filed by the DA’s Office in October of 2005.

The 25-page complaint details 114 overt acts in which the defendants allegedly took part. There also are 24 additional counts that charge the defendants with grand theft of personal property exceeding $400.

CLASS ACTION STILL PENDING On the same day of the raid in 2002, a class-action lawsuit was filed against the dealership in downtown Los Angeles Superior Court. That suit has been put on hold until the criminal investigation is complete, said Dan Hoffman, the attorney representing the plaintiffs.

Customers who have signed onto the lawsuit allege they had been given favorable deals in the showroom only to have the dealership’s finance department renegotiate the deals afterwards. Such a practice is forbidden by state law, according to the lawsuit.

Hoffman said he will proceed with the class action suit despite the settlement between Kramer Motors and the DA’s office.

However, the notice and release being sent to customers includes language that appears to make any future claims against Kramer Motors null and void: “I/we understand that acceptance of the restitution check will constitute full settlement, compromise, waiver and release of any and all claims, legal and equitable, known or unknown, including any and all claims asserted in individual suits, class actions... against Kramer Motors Incorporated...”

*Originally published in the Santa Monica Daily Press print edition on March 1, 2006.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/030106.pdf?ref=smdp.com)